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Saturday, January 17, 2009

Lithuanian carrier flyLAL will cease operations today, January 17, 2009, according to a message posted in the airline's website. The airline's management says the move came after a deal to sell the flyLAL's assets to an outside investor, identified by the airline as Swiss investment fund SCH Swiss Capital Holding AG, fell through.

In a prepared statement, Vytautas Kaikaris, CEO of flyLAL, said, "We decided that ceasing operations of flyLAL – Lithuanian Airlines is the only possible decision in the current circumstances. This decision is triggered by intention not to increase damages and worsen conditions of the airline’s creditors."

Kaikaris blamed unfair market conditions, record-high oil prices and low demand for winter season flights as the main reasons for airline’s business downturn. Another major factor, he said, was "the current fleet, which did not correspond to the new market conditions – the load factor did not reach the targets, therefore flight operations only increased airline’s loss."

flyLAL – Lithuanian Airlines will file for bankruptcy "if no proposals for future airline development are received in the nearest days,"according to the CEO's statement.

Meanwhile, a report by the AFP news agency suggests that the decision to shut down flyLAL's operations actually occurred after a court froze the airline's assets at its creditors' request, and the airline's operating license was suspended. The AFP article quoted Lithuanian Transport Minister Eligijus Masiulis, who said, "Civil aviation operations are heavily regulated and supervised. FlyLAL is not meeting the requirements due to its difficult situation."

AFP also reported that while flyLAL was ordered to halt all scheduled flights as of January 17, 2009, its charter arm, would remain in service. In any case, the last scheduled flight operated by flyLAL reportedly departed from Amsterdam on January 16, 2009 19:30 local time.

Headquartered in Vilnius, Lithuania, the airline had 360 employees.

"We sincerely regret that the current situation has led to this painful decision and no other solution was found," said Kaikaris.